Close Big Oil Tax Loopholes Act

Mr. President, I ask unanimous consent that I be recognized for up to 15 minutes, and that the following list of Republican speakers be recognized for up to 10 minutes each, not necessarily in this order. But the Senators to be recognized will be

McCain, Chambliss, Cornyn, Barrasso, Paul, Hatch, Hutchison, and Vitter.

Thank you, Mr. President.

I have also come to the floor today to speak about the proposal to raise taxes on the five largest domestic energy producers. I think it is important we remember we are speaking about five energy producers, five oil companies. We are not talking about a tax proposal that is broad and wide and encompassing. We are talking about a proposal to raise taxes on the five largest domestic energy producers.

I have to admit, I had some hesitation about even engaging in this floor debate at all because I think we recognize that the words and the statements we are delivering here are just that; they are just talk, they are just words. This proposal is designed to fail. But in failing, it is designed to score some political points, and it seems as if that is where we are today. But as a Senator who represents a State--Alaska; an oil and gas producing State, a State that would clearly be hurt by this proposal--I am obliged, obligated to outline why I feel this is so deeply flawed.

I want to start by stating the obvious here. This legislation will not reduce energy prices, but, if anything, it will increase our energy prices. It will not substantially reduce our deficit or our debt, but, if anything, it will add to those burdens by shutting off production and forcing the government to forgo production revenues.

I think it is important we put this in context because people around the country--as they look at the price at the pump go up day after day--are saying: What are you doing in Congress to lower the prices? What are you doing to deal with the higher price of gasoline in this country?

I think it is important we recognize this legislation we have in front of us does nothing to reduce our energy prices. It is not just me who says that. The chairman of the Finance Committee has indicated that. We have heard several Members on both the Republican side of the aisle and the Democratic side of the aisle say this is not going to reduce our prices. So what exactly is it we are seeking to do, other than send a message?

This proposal, I think it is important to recognize, will hurt poor and working families across our country. We all know what the price of gas is in our respective States. I will remind my colleagues that as much as Alaska benefits from high prices of oil, as we are a producer, it is a fact that it kills us in our local communities in our economies because we are the State with the highest gas prices across the country right now.

There was a news story last week back home. In Kotzebue, which is the northwest region up in the State, they are paying $7.55 in Noorvik, $8.25 in Kobuk, and $8.95 in Ambler. I was in Fort Yukon a couple weeks ago. There they are at a $5, $6, $7 gas figure. But the spring barge, which will be coming in in about 4, 5 weeks now, will be delivering fuel at prices that were set some weeks ago, and people have been alerted that on the day the barge delivers the fuel, the price will go up at the pump one additional dollar. We are not talking cents here; we are talking an additional dollar paid by the people in Fort Yukon.

So we know very well what high prices mean to us, and our constituents are asking us to do something about it: What can you do to lower those prices, to develop a coherent energy policy that starts to work now, and then yields progress over time? Our constituents are not asking us to make this problem worse. Yet that is precisely what these proposed tax increases will do.

I heard my colleague here say that, no, this is not designed to increase the prices that are out there. Well, it might not be designed to do that, but that is what we can expect if, in fact, these tax increases do go into play.

It has been a few years since I got my degree in economics, but even though it was more than a few years ago, I do remember some of these very early entry level classes I took. I remember learning that raising taxes on something is going to tend to make it more expensive. And I remember learning that when you tax something, you tend to wind up with less of it. That is just basic economics.

I think there is at least some understanding of these concepts around here because I do not see anyone who is proposing to raise taxes on solar panels or raise taxes on wind turbines to bring down their costs.

The reality is, this proposal--and I believe the point is conceded by its supporters--this proposal will not cause gasoline prices to drop. Instead, it could very well cause them to rise. I understand a memo from the Congressional Research Service suggests that no significant impact on prices will be seen in the short run. But that is the key phrase here: in the short run. Because what we need to be doing is looking longer term than next week or next month.

Whenever corporations face increased costs, they have a responsibility to their investors to recover those costs wherever possible, and usually what happens is, they pass them on to the consumers. To the extent the costs of this proposal cannot be passed on, and these companies will simply have less to invest in new projects.

That is talking about what does not happen with the price of gas. But this proposal is also not about reducing the debt either. I think it is important to put that in context. At best, it may be a drop in the bucket. According to the CBO, the President's budget for fiscal years 2012 through 2021 would result in nearly $9.5 trillion in new debt. This proposal, assuming it has no negative economic impact, would raise $21 billion, or about 0.2 percent of that debt. We would still need something like 450 times more revenue to break even, never mind the $14 trillion debt we have already incurred. We all know we hit the debt ceiling yesterday, so it does cause you to wonder: Is this the best we can do when we are talking about balancing the Federal budget?

I understand this proposal is not all it will take, and no one is proposing that it do so. But I think it is important we be honest with the American people when we talk about what this would mean in terms of a reduction in the deficit. If we are being honest with each other, we are going to see this proposal for what it is. Essentially a ``yes'' vote tonight to raise taxes on oil and gas companies is simply a vote to try to take a pound of flesh from these five major companies that, yes, in fact, are making money, yes, in fact, are making a profit. A ``no'' vote on this proposal tonight is a vote to try--try--to keep our prices under control, and it is a vote to help preserve America's competitiveness within the global economy.

I also want to take a moment to kind of set the record straight on subsidies. There are no payments from the Federal Government to the major energy producers as some have implied. Past Congresses have decided that those companies--and most other companies in America, I might add--deserve certain tax reductions. This is a critical distinction because we have not decided the Federal Government should actually give more to these companies. What we have decided is, the Federal Government should take less from them.

If that is the same as a subsidy, then new homeowners are direct recipients of subsidies because we deduct mortgage interest payments, and that means almost every company in our country--whether it is a Hollywood studio or the New York Times, whoever it is--almost every company then is somehow or other subsidized.

If we are talking about leveling the playing field by eliminating all the incentives within our Tax Code, especially in the context of broader reform that makes our Tax Code simpler and more fair, I welcome that discussion, and I think many in this Chamber do. It would be a much different conversation if we were considering a reduction in the corporate tax rate. But, instead, we are here debating whether to give different tax treatment to essentially punish a handful of companies in just one sector of our economy, and there is no policy justification for it other than they can afford it, they are making money, they can afford it.

I would ask my colleagues, is this the kind of business climate we want for the United States? I have to wonder, then, if the answer to that is yes, who

the next target will be, if making large profits signals to Congress you should be taxed at a higher rate.

In reality, domestic energy producers are already amongst the most heavily taxed companies in this country. While the effective tax rates for all corporations averaged 26.5 percent last year, the oil and gas industry's tax rate was at a much higher 41 percent. Instead of being subsidized by the Federal Government, the industry is actually a very large taxpayer.

The Federal Government taxes gasoline at a rate of 18.4 cents a gallon. It also receives billions of dollars each year in nontax revenues from the industry. Producers must pay the government for the rights of each of their leases. They have to pay the annual ``rents'' to hang on to those leases. They pay the royalties on any production that ultimately results from them.

So in terms of what is paid out, according to one estimate, the oil and gas industry's total payments to the government amounted to $86 million per day--per day--in 2010.

I would also remind my colleagues that the President has established a goal of cutting oil imports by 3 million barrels a day by 2025. If we intend to achieve that goal, which is a good goal, raising taxes on domestic oil production defies logic. To reduce imports, we will need to increase our domestic production. That will not happen if we impose a hostile tax environment for the companies that operate here-- companies that are already challenged to produce the oil and gas resources we know we have but we have not been allowed to explore.

Before I conclude, I want to mention an article that recently appeared in the Financial Times. It noted that in 2011--this year--OPEC nations stand to take in more than $1 trillion from exporting oil. Our Nation--the United States--will provide a pretty good share of that money, likely tens of billions of dollars. And what do we hear about it? Nothing from the people who are proposing these tax increases, nothing about the tremendous sums of money we send overseas each year for foreign oil--just the far smaller sums that could be collected from domestic companies through higher taxes. That is missing the forest here, to cut down the one tree that happens to be growing in our line of sight.

So here we are. Instead of doing everything we can to halt the hemorrhage of Americans dollars to foreign countries, the Senate is now focused on an effort to raise taxes on five companies that actually operate here. The day after we hit the debt ceiling, we are debating a measure that would hardly make a dent in our debt. We are on pace to spend trillions of dollars outside of our economy in the years ahead, and we are on pace to incur trillions in Federal debt, but so long as a few companies pay higher taxes, somehow or other it makes us all feel better. No wonder the American people have lost so much faith in the legislative process. No wonder so much blame for high energy prices is placed on the Federal Government.

The proposal before us today is not an answer for high gas prices or the Federal debt. It is more likely to raise our energy prices, reduce our Nation's oil production, and deepen our annual deficits. I had hoped we would have a good, substantive, reasoned debate and discussion about how we are going to solve all these problems. But instead we are left to debate a measure that is all but certain to fail.

I think the Senate can do better. We will have a debate tomorrow about the Republican alternative--a bill that while it is not perfect will increase production, generate revenues for the government, create new jobs, and improve the safety of our offshore operations. If we are looking for good policy, I think that is where we need to start.

We have a long way to go. But I think what we have before us today is unfortunate.

I yield the floor.

Mr. President, I rise today to speak about the energy-related votes we face this week in the Senate.

Coloradans--and all Americans--are feeling the sting of skyrocketing gas prices. And ``pain at the pump'' puts a crimp in the budgets of hardworking families and small businesses everywhere. I hear this every time I am back in my home State, talking to folks. They think it is unfair--and I agree.

Runaway gas prices are not acceptable and we must work across the partisan divide to bring a stop to it.

In fact, I recently called on the State Department and the U.S. Trade Representative to do everything they can to crack down on global oil market manipulation. And I joined my colleagues in urging the Commodity Futures Trading Commission to ratchet up their efforts at preventing overspeculation in oil trading domestically. Taking these steps would help reduce the chance that market manipulation is hurting American consumers.

But from a larger perspective, the challenge is that we simply do not have any quick fixes. And substantial relief today would have required us to take steps years ago to reform our energy system. Unfortunately, we let those opportunities pass us by. That is the unvarnished truth the American people

need to hear, not false promises or bumper sticker solutions.

The real solutions involve tough choices and strategic investments in clean energy that will help wean our Nation off foreign sources of oil. It really is the only way we will be able to dig ourselves out of this hole and lower gas prices. And, importantly, it is one of the ways that we will get the United States back on the path to winning the global economic race.

Unfortunately, neither of the votes we will take this week will reduce gas prices for consumers.

As are most Americans, I am frustrated that once again politics is getting in the way of progress I would much rather be debating a comprehensive energy policy this week that includes a renewable electricity standard, promotes energy efficiency, and encourages responsible development of domestic resources such as safe nuclear power and natural gas.

We need to move beyond partisan fights and blame games. Instead, we need to work toward what we all can agree are key priorities: developing energy that brings affordable prices to American families and businesses; building a sustainable, long-term energy future; and doing it in a way that protects our clean air and water for future generations. Put simply, establishing energy security--perhaps above any other issue--will assure our Nation's future success.

We each often say that our States are the best laboratories to create innovation. But in Colorado, we have a great example of this in action.

Back in 2004, Colorado cast aside partisan politics and bumper sticker solutions by taking a big, brave step forward and embraced the emerging clean energy economy. That year I led a bipartisan ballot initiative with the former Republican Speaker of the Colorado House, Lola Spradley, in a campaign to convince the voters of Colorado to approve a State-based RES that would harness renewable resources like the sun, the wind, and geothermal energy. We barnstormed the State, speaking over and over to anyone who would listen.

There was a lot of industry opposition to an RES, and dire predictions that it would cost consumers money and damage Colorado's economy. But, those arguments were proven wrong. And Colorado industries, consumers, and people across the political spectrum have embraced clean energy as part of Colorado's effort to win the global economic race.

In fact, last year, the Colorado Legislature approved, and former Governor Bill Ritter signed, a bill to increase the RES standard even further: from 20 percent to 30 percent renewable energy by 2020. This makes the Colorado RES the second most aggressive standard in the Nation, only after California.

Even more refreshing is that in the years since Colorado established one of the earliest and strongest renewable electricity standards, our energy producers have embraced the move. One of our State's largest utilities, Xcel Energy, has become a national leader in clean energy. In proving that clean energy can be profitable and competitive, Xcel is making the case for how an RES can create jobs, stimulate the economy, and help us achieve energy independence.

The clean energy economy is one of the greatest economic opportunities of the 21st century, and the global demand for clean energy is growing by $1 trillion every year. The lesson to be learned from Colorado is that clean energy can unleash the American entrepreneurial spirit. We must pursue forward-thinking policies that will help America seize and lead this growing market.

Make no mistake. We are in a race against foreign competitors and are quickly being left behind. Last year, I returned from China where I discussed clean energy issues with American businesses located there. I saw it firsthand. They are ready to eat our lunch when it comes to clean energy. China is pursuing renewable energy and clean energy technology so ambitiously, not because they want to save the planet but because it makes good business and economic sense.

In fact, China has announced that it is investing over $738 billion over the next 10 years in clean energy development--nearly the size of our entire American Recovery and Reinvestment Act. Just imagine, their economy uses a comparable amount of energy, but they take clean energy so seriously that they plan to invest a stimulus-sized amount of money solely in renewables.

But we can't just rely on renewable energy. Rather, America must have an all-of-the-above energy policy. For example, conservation and energy efficiency efforts offer the quickest way to reduce energy demand today. And safe nuclear energy and natural gas can and should fill a larger share of our energy portfolio as they both are cleaner fuels. In addition, we all know America will be dependent on fossil fuels for years to come, so it is not realistic to exclude them in our strategy. All of these elements should be in America's energy mix and we must acknowledge that to really embrace 21st century solutions.

But when we look at the future demands for clean energy and the economic opportunities ahead of us, renewable resources hold the greatest promise. And the more home-grown renewable energy we can produce, the less money we need to spend buying oil from foreign nations that wish to do us harm, which means less money spent at the gas pump. I don't think anyone in this Chamber can argue with the proposition that we should be moving aggressively toward energy independence with dividends like that.

It is time we made a concerted national effort to reclaim our position at the front of the pack. We should be harnessing the wind and sun and other renewable resources here in America, and putting Americans to work in good-paying jobs developing, building, and leading the clean energy revolution. It is an example of what we call back home ``Colorado common sense.''

But instead of pursuing some commonsense goals that are sure to move our economy forward, we are here today exchanging political punches on issues largely unrelated to our energy independence and the prices Americans pay at the pump.

While I support reducing tax breaks for the five largest oil companies, I honestly wish this issue was a smaller part of a larger discussion on a comprehensive energy strategy that allows the U.S. to lead the global economic race. That said, I will vote to repeal these needless tax breaks for Big Oil. Traditional energy production has received billions in subsidies over the last 70 years. And the top five oil companies in particular make billions in profits that far exceed the need for government support.

I happen to agree with the thousands of Coloradans who have told me: these companies--among the biggest in the world--don't need and shouldn't receive taxpayer money, especially as we look for ways to consolidate our Tax Code and reduce the deficit.

It is important to me that this bill is limited to the top five companies and does not include small, independent producers that provide many jobs in Colorado. I should note that there are some tax credits--such as the production tax credit for wind, the investment tax credit for solar, and the intangible drilling costs tax credit for small oil and gas producers--that are important to jobs in Colorado and across the country. While my ideal energy market would be free from any tax credits, I also want to make sure we continue to invest in domestic energy industries that still need help getting off the ground. Just as with most policy, it is a delicate balance.

In my home State of Colorado and in the Presiding Officer's home State of Pennsylvania and all over our country, Americans are feeling the sting of rising gas prices. The pain at the pump puts a real crimp in the budgets of hard-working families and businesses everywhere. I hear this every time I am back in my home State listening and visiting with the folks there. They think it is unfair, and I have to say I agree.

Runaway gas prices are not acceptable. I think it is our job, working across the partisan divide, to bring a stop to it. I have to tell my colleagues, instead of pursuing some commonsense goals that would move our economy forward and would mold a comprehensive energy proposal, we are punching away at each other on issues largely unrelated to our energy independence and the prices Americans pay at the pump.

I am going to support the vote today. We ought to reduce tax breaks for the

five largest oil companies. But I have to say I wish this had been part of a larger discussion on a comprehensive energy strategy to allow us to lead the global economic race. That said, I am going to vote to repeal what I think are needless tax breaks for Big Oil.

Traditional energy production has received billions of subsidies over the last 70 years--70 years--and the top 50 companies in particular make billions in profits that far exceed the need for more government support. I happen to agree with thousands of Coloradans who have been in touch with me to say that these companies, which are among the biggest in the world, don't need and shouldn't receive taxpayer money, especially as we look for ways to consolidate our Tax Code and reduce the deficit.

It is important to me that the bill is limited to the top five companies and doesn't include small, independent producers that provide a lot of jobs in Colorado. I should note that there are some tax credits, such as the production tax credit for wind, the investment tax credit for solar, and the intangible drilling costs tax credit for small oil and gas producers that are important for jobs in Colorado and across our country.

I think we would agree that the ideal energy market would be free from any tax credits, but I also wish to make sure we invest in our domestic energy industries that still need help getting off the ground. As with most policy matters, this is a delicate balance.

Let me wind down my remarks with this request to my colleagues, that we would take responsibility for our economic future and get serious about energy independence. That means we would have to shed, each and every one of us, some of our doctrinaire positions and what is too often on the floor a ``my way or the highway'' approach. There are ways to responsibly drill for oil while also increasing our renewable electricity production. There are ways to safely expand nuclear power while also boosting energy efficiency. There are ways to harness natural gas as a bridge fuel while also spurring a generation of electric cars.

These are not either/or propositions. I think we especially have to seize the clean energy opportunity that is in front of us, so 2, 4, and 10 years from now we are not still sidetracked by political infighting because we, once again, failed to make the tough decisions. A comprehensive energy policy is critically important to our Nation's economic recovery and our long-term energy future. Believe me, Americans are ready for it. In fact, they are demanding it.

Thank you. I yield the floor and note the absence of a quorum.

Mr. President, I rise to follow on the majority leader's bringing this legislation to the floor, which I am privileged to sponsor with a whole host of my colleagues, and really to speak out for taxpayers and against continuing to provide subsidies to multibillion-dollar big oil companies. We are talking about the big five. We are not talking about any other entity, just the big five.

A positive vote on my bill presents a simple choice for everyone in this Chamber: Are you on the side of working class families or are you on the side of Big Oil? There are lots of ways to cut the deficit. Many of our colleagues, particularly in the other body, want to end Medicare and cut student loan programs. What I and my cosponsors want to do is end wasteful oil tax breaks for a wealthy industry that does not need them.

Clearly, we all need to tighten our belts to help address the deficit--all of us--even the oil companies. We all know oil companies are among the largest, most profitable companies in the world, but sometimes it is hard to understand the true scale of their wealth. So this chart is a simple attempt to give some perspective.

The median income in the United States is about $50,000. ExxonMobil, just one of these big five, is projected to earn in profits $42.6 billion this year--$42.6 billion. Now, it is impossible to show this disparity on a chart,

but if this chart were to scale and each bundle of money equaled $50,000, then we would need more than 850,000 stacks of bills to equal ExxonMobil's profits over the next year. So 850,000 stacks of bills on this poster would be about 170,000 feet high or about 32.2 miles straight up, through the ceiling of this Chamber, and beyond the stratosphere.

Now, the printing and graphics department is very good at the Senate, but 32 miles of posters was probably a bit much. So I decided not to do that. I appreciate the Parliamentarian acknowledging that I shouldn't have done that.

My bill would close several loopholes for Big Oil--loopholes that, given the current budget climate, would let Big Oil get away without making any sacrifices at the very time we are asking middle-class families, the disabled, and the elderly to tighten their belts and help reduce the deficit. There simply is no commonsense explanation for balancing the budget on the backs of working families and letting multibillion-dollar oil companies keep billions in taxpayer dollars.

At the same time the median income is $50,000 for Americans, here is what it is if you are a CEO of one of the big oil companies. In the last year alone, the CEO of ExxonMobil got paid $29 million. The ConocoPhillips CEO last year was paid about $18 million and Chevron about $16 million. Most Americans will never see that in their lifetime of work. So to have these executives come last week before the Finance Committee and say, as one of the companies put out, the suggestion about taking away some--not all, some--of their tax subsidies was un- American is pretty outrageous.

Let me explain the provisions of my proposal. The first provision has to do with foreign tax credits. U.S. taxpayers are taxed on their income worldwide, but they are entitled to a dollar-for-dollar tax credit for any income taxes that are paid to a foreign government. They get that taken off. It makes sense because we don't want to tax the same activity twice, but U.S. oil and gas companies have pretty smart lawyers and clever accountants. They have figured out if they can convince a foreign government, such as Indonesia, to charge them taxes instead of a royalty, which is, in essence, a fee they pay for the purpose of drawing that oil out of that country, they can get a big break on their U.S. taxes. But what this amounts to is that the U.S. taxpayer is subsidizing foreign oil production. This bill would close that loophole and return $6.5 billion to the Treasury.

Another one. In 2004 Congress created the domestic manufacturing tax deduction. It was designed to help U.S. manufacturers that export a product to a foreign market; so cars, iPhones, iPads, all of that. Well, few would see the extraction of oil from the ground as manufacturing, but, again, Big Oil's lobbyists earned their money. They saw an opportunity, some made phone calls, and, lo and behold, according to the Tax Code, oil companies are in the manufacturing business.

This legislation closes that loophole and saves taxpayers almost $13 billion. That would be $13 billion more toward deficit reduction.

Now, the American people understand this bill. They understand Big Oil makes enormous profits. There is nothing wrong with making profits, by the way, but they don't need to have our tax dollars in order for them to make those profits. The American people understand Big Oil does not need taxpayer subsidies, and they understand if Big Oil wants to lower gasoline prices, they could put a lot less money in stock buybacks and a lot more in lowering prices or producing more oil.

But in order to combat this straightforward, commonsense bill that even the CATO Institute supports, Big Oil and its supporters have come up with some pretty straining rhetoric. The strangest by far, as I alluded to before, is suggesting that those who support cutting these wasteful subsidies are un-American. It seems to me when a company stoops so low as to question the patriotism of those who would suggest that maybe they can do without $21 billion in taxpayer subsidies when they are going to make anywhere between $125 billion in profits--not proceeds, profits--to $140-some-odd billion, to question the patriotism of those who suggest they don't need further taxpayer subsidies is to suggest they don't have very good arguments on their side.

The charge of un-American is outrageous, and I think the 74 percent of Americans who support ending oil subsidies know they are more American than that point of view.

Another argument I keep hearing is that oil companies are entitled to these breaks. This argument seems to suggest that the wealthy and powerful deserve what they get, and working class families should know their place and know better than to ask oil companies to do their fair share as well. Warren Buffett, one of the richest men in America, said:

There's class warfare all right, but it's my class, the

rich class, that's making the war and we're winning.

This bill says even the most rich and powerful among us must do their fair share to help us reduce the deficit. Their high-priced lobbyists cannot stop us from doing what is fair and what is right.

Some in the industry have also claimed that cutting $2 billion in annual oil subsidies to the big five oil companies will somehow make oil and gasoline more expensive. That argument is absolutely false. This bill would save taxpayers $21 billion over 10 years, roughly a little over $2 billion per year. Compare $2 billion in taxpayer subsidies to the projected--anywhere between $125 billion and $144 billion in profits the big five oil companies are expected to make this year. So if the big five oil companies could just live with $142 billion in profits in 2011, they could pay their fair share in taxes, help lower the deficit, and not raise the price of gasoline.

Let's put it a different way. The Finance Committee recently went through the corporate filings of the big five oil companies and found their costs of extracting oil is about $11 per barrel. When oil is trading at nearly $100 per barrel, it is simply absurd to suggest that the costs oil companies are facing is what is determining the price of oil or that cutting $2 billion per year in subsidies will somehow force oil companies to raise prices.

In addition, the nonpartisan Congressional Research Service just came out with a definitive report echoing the sentiments of countless economists and other disinterested observers concluding that my legislation would not increase gas prices at all.

So it is time for the big five to do what is right for a change and pay their fair share. This should not be hard since in 2005, the CEOs of some of the big five oil companies testified they agreed with former President Bush that they do not need subsidies to drill for oil when it is selling at $55 per barrel. Well, it is selling at nearly $100 per barrel right now, so it is quite strange that anyone thinks they need government handouts to drill when the marketplace is driving them that way. We simply cannot expect the average working family to shoulder the burden of lowering the deficit alone.

I hope some of the favorable comments I have been hearing from my Republican colleagues in recent weeks means they are ready to join in this effort and lower the deficit because all of the savings go directly to deficit reduction under the legislation, and do so in an equitable and effective manner.

What is fair is fair, but nothing about continuing these subsidies is fair. Those on the other side would end Medicare as we know it in the name of deficit reduction while continuing to pump billions of dollars in corporate welfare into a $100 billion profit industry. That is the height of hypocrisy. It is not fair to working families. It is not a wise use of limited Federal resources. If this body does the right thing today, it is not going to continue. There is nothing fair about the suggestion of ending Medicare in favor of Big Oil subsidies.

Big oil has to do the right thing by America. They can be part, and should be part, of the solution to our deficit challenge, and that is the opportunity we have today.

Mr. President, I yield the floor.

Mr. President, how much time remains?

Mr. President, the American people understand this bill. They understand that if working families must sacrifice to help lower the deficit, then so should the most wealthy and powerful industry in the country. If Big Oil wants to lower gasoline prices, they would put a lot less money in their stock buybacks or their multimillion dollar CEO salaries and a lot more in producing oil or they could use some of their enormous profits to lower prices. But I guess in that world greed is good.

While the American people understand this bill--it is clear for them what it does--many on the other side of the aisle simply do not. Because this is such a simple, commonsense idea, they have made up arguments just to get through this debate.

One of my colleagues said it would raise the deficit. Only in Washington--only in Washington--could that comment actually be made when the Joint Tax Committee has clearly made it known this would lower the deficit by $21 billion. It would lower the deficit by $21 billion, not raise it.

Another argument I have heard is that this bill will somehow raise gas prices. That argument is absurd. With the big five oil companies poised to make $144 billion in profits this year alone, it means Big Oil would simply have to settle for $142 billion in profits this year to pay their fair share of dealing with the deficit, and they wouldn't have to raise gas prices 1 cent. That is what the Congressional Research Service independently decided, as well as the Joint Tax Committee.

I have also heard the argument Big Oil actually pays more taxes than other companies. That is not true for multiple reasons. ExxonMobil's effective tax rate is actually lower than the average American family's rate. They pay far higher taxes abroad than they do here, so there is no competitive disadvantage, and we have the lowest royalty rates in the world.

We have rarely seen in this body a more stark contrast and a more obvious choice. American families are sitting around the kitchen table trying to figure out how to make ends meet within the constraints of their own family budgets. We are simply asking Big Oil--making $144 billion--to do their fair share. That is what this vote is all about.

Mr. President, I ask for the yeas and nays.

Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. President, I rise to speak in opposition to the Menendez proposal which would raise taxes on a handful of our Nation's energy producers. This bill makes the assumption that raising taxes on the five

major oil companies will somehow reduce the deficit and lower the price at the pump. This is misguided and it will also have the opposite effect. Raising taxes on our domestic oil industry will drive up gasoline prices and who in America driving a truck or a car doesn't realize that gasoline prices are already very high? Second, it will threaten the jobs, 9 million jobs dependent on drilling, exploration, and operating in America. If we drive these companies overseas, it will increase foreign imports and it will stop jobs being created in America.

Those who threaten to repeal these deductions fail to recognize the tremendous costs and risks that go into exploring for the energy needed to drive our country forward. Our oil and gas industry is a business or industry that creates jobs like any other business or industry in our country. Why would we single out one sector of our economy and say you can't deduct your expenses? Every other business in America can deduct expenses. Other manufacturing businesses in America can get the tax credits for manufacturing jobs because we want to keep jobs in America and it offsets the very high corporate tax rate that we have in our country, that the President has recognized as being too high. Because we want to keep manufacturing jobs, there is a credit for manufacturing. But we are going to take that away if the Menendez bill passes, and send those jobs overseas.

We are making it so hard to create our own natural resources from our own people working in this country, instead sending jobs overseas. At a time when we ought to be helping to create jobs, when we ought to give every possible fair break to companies that will hire in America, now we are going to take one sector of our industry and tax it differently from every other sector.

Since business started in our country we have had tax deductions for expenses. Yet here we are trying to say we are going to take one sector of our industry--maybe they are doing too well right now--and we are going to tax them more. Look out, other industries that happen to be successful right now; whether you are making Kleenex or computers, you are going to be taxed if you earn too much. Is that what America wants to change to, as our business policy, which has a foundation of fairness and equity?

We have a corporate tax rate that is so high it encourages businesses to go overseas. Now we are going to single out one industry that wants to do work in America, that wants to bring our natural resources out of the ground and bring down the price at the pump. But, no, we are going to add taxes so we will not see any lowering of gasoline prices at the pump. Instead, we are going to increase it. If we increase the cost of doing business and we force these companies to go overseas to get fair and stable regulatory environment, then we are going to pay more at the pump. There is no doubt about it.

Senator Landrieu and I introduced bipartisan legislation earlier this year called S. 516, the Lease Extension and Secure Energy Act of 2011, known as LEASE. It restores time lost as a result of the offshore moratoria by extending the impacted leases by 1 year. It is fair and it is simple.

Over the weekend, the President stated he would be extending leases in the Gulf of Mexico that were affected by the moratorium, but he was not clear about which ones. He didn't say I will extend every lease that went through the processes to get the environmental and the safety restrictions in place.

They got the lease. Then they had a moratorium. So they are paying people, they are continuing to have all of the expenses of the lease but they do not get to do the exploration. We are saying whether you were in the exploration phase or in the drilling phase it doesn't matter. If you are impacted by a moratorium on a lease that you are still paying for and you are still paying people to try to keep people on the payroll, your lease will be extended for 1 year. That is all the bill Senator Landrieu and I submitted will do.

The Secretary of the Interior, at a hearing this morning in the Senate, said they were looking into extending Gulf of Mexico ``wells'' directly impacted by the moratorium--meaning only those leaseholders who have already performed all seismic tests and were conducting exploration drilling. This will only cover 33 leases out of thousands that are still affected by the moratorium, because they are in the exploratory phase, not the exploratory drilling phase.

This year alone, over 350 leases are due to expire. Many of them have not had the opportunity to be developed because of the moratorium. The development of oil and gas in the Gulf of Mexico is an extremely expensive and technical process. It takes about 3 years of tests, surveys, and appraisals before even drilling for the exploration well. Regardless of which stage all of the exploration leaseholders are in, the administration ordered all leaseholders to halt exploration activities when its moratorium was enacted. Every one of those leases is still being paid for but they are not able to be explored. We need to restore at least 1 year of the moratorium so they get fairness for the money they have spent and also for the people they have kept hired, not sending them away--which has been a hardship on many companies, including some having to go bankrupt because they could not afford to be idle while they also were meeting a payroll.

The exploration and development of oil and gas must follow a meticulous process, and any delay such as a moratorium can derail an exploration plan causing companies to have to give up on their leases. The length of deepwater offshore leases is usually about 10 years because that is what it takes to get all the way through the exploration and the exploration drilling phase to determine if it is worth actually drilling. Many times when you drill, you get a dry well.

Our commonsense legislation has bipartisan support. Recently, the Office of Management and Budget stated, ``The administration fully supports suspensions for Gulf of Mexico leaseholders directly impacted by the drilling moratorium,'' but the administration fails to recognize that all leaseholders in the Gulf of Mexico were ``directly impacted by the drilling moratorium.''

James Noe, the executive director of the Shallow Water Energy Security Coalition, wrote me to express his support for the LEASE Act. In the letter, he said:

Without the LEASE Act, vast quantities of proven, present

and producible oil and gas in these expiring leases will be

trapped.

Leaving the resources trapped will hurt our domestic production and delay when these resources can come online.

I received another letter from Stephen Heitzman, the president and CEO of Phoenix Exploration, a small Houston-based exploration company. Mr. Heitzman wrote that the LEASE Act is vital to Phoenix Exploration and other small offshore companies because they have been prevented by the administration from drilling in the moratorium and have not been able to even evaluate many of their Gulf of Mexico leases which have been fully paid for through the competitive bidding process. He goes on to say the time lost from the moratorium makes it very difficult for shallow water independent operators to put together the partnerships and attract sufficient capital resources needed to develop leases.

The LEASE Act is needed to give offshore energy producers the certainty they need to obtain proper financing to produce domestic oil and gas.

I ask unanimous consent that the letters I have read excerpts from be printed in the Record.

Mr. President, let me close by saying I hope we will not do something so wrongheaded and counterintuitive as to take one section of an industry and say you are bigger than all the others, so we are going to tax you differently. We are not going to give you the manufacturing tax credits we give to every other manufacturer in the world, including the big ones that manufacture in the United States, and we are also going to tax you differently from the smaller oil and gas companies because you are big and they are small. Is that America? Is that the country that wrote a Constitution that said we would guarantee due process of law, that we wouldn't single out one company that is bigger than the others and tax it differently? That is not what our country was founded on.

We should have a fair process. We should have fair taxation. We should be encouraging manufacturing in our country because these companies have a trust with their shareholders. We expect them to do well for their shareholders, and they have millions of shareholders who depend on them to do the right thing with their business and with the investment these shareholders have made. I might add that many pensions are dependent on these kinds of stocks, and it is expected the CEOs will run the companies in a way that will keep our economy going, keep jobs in America, and keep their stockholders in a position where retirees can live on the income. We are singling out an industry and saying: No, you are too big, so you are going to be taxed differently from other industries, and you don't get the manufacturing incentives that even other big manufacturers get. Why wouldn't they move overseas to create jobs overseas where they have a stable regulatory environment, a lower tax base, a lower tax rate, and where they can bring up oil from the ground and import it right back into America, even though it will be at a higher price because we are going to have to pay for the people to go overseas and haul the oil back.

Does that make sense? It doesn't make good business sense, and it certainly doesn't make good economic sense. It is not good for our country, and it is certainly not good for the job market we are trying to build.

I hope we will not make the mistake of going forward on the Menendez bill. I hope we will realize we are a country that has vast natural resources and we should be using those resources so our businesses can thrive, so prices stay low, so people will not be strained to put gasoline in their trucks to go to work or to do their farming or ranching to contribute back to the economy. I hope we will defeat the Menendez bill, and I hope we will adopt a policy that will come through the McConnell bill tomorrow which will increase exploration, increase production, and lower the price of gasoline through our own natural resources, not by importing our own--the jobs that ought to be in America, exporting the jobs and importing the product. That doesn't make sense. Let's keep the jobs in America and let's keep our natural resources working for us. That would be the prudent thing to do and that will be the McConnell bill.

I hope we can defeat the Menendez bill, and maybe we can come together in the Senate and give the President a bill that will ask that we have more production and give the level playing field to all the companies that would hire more people and create jobs in America. They will do it if there is a level and fair and stable regulatory and tax environment in America.

Thank you. I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to speak for up to 15 minutes from the time reserved on the majority side on this issue.

Mr. President, this is a very important issue we are debating today, and there are very different views about how we should proceed. I rise to object to the Menendez bill that is on the floor. I urge my colleagues to vote no, and I wish to give at least five reasons why.

I don't think this bill is the right approach. It will not solve the problem of high prices at the pump. I think, in many ways, it is actually a waste of time to be taking a whole day on an issue that is not going to result in lower prices at the gas pump or in more domestic supply, which are two things we need to attempt to do sometime in the next short period.

I have a great deal of respect for my colleague from New Jersey--as I do my colleague from California, who spoke in favor of this direction-- but I want to give a couple of thoughts about why I will be voting no and why I am urging my colleagues to do the same.

According to economic analysis, the bill Senator Menendez presents to us

today to remove tax credits and subsidies from the five major oil companies will do nothing to lower prices at the pump. So as everyone goes to fill up their cars, their trucks, or their minivans today, even if this bill passed--which it will not, because it will not get near the 60 votes needed to move it forward--it will not lower prices at the pump by 1 penny.

Mr. President, I ask unanimous consent to have printed in the Record a document I am going to refer to, which is information from an independent economic analysis.

Mr. President, it might make us feel better to beat up on Big Oil, it might present a scapegoat in some quarters, but it will not lower prices at the pump, and that is what we need to talk about. The economic recovery we are in--slow and spotty in places, but underway--can be stalled out by prices as high as $4.37 a gallon--a price I saw at a station right here in the Washington, DC area. That is frightening to consumers, to families, to small businesses, and to large industry that are seeing their cost of business go up because of these prices. We should be working on real solutions, and this is not one of them.

According to the Joint Economic Committee report on this bill, published last week, repealing these tax incentives ``would have little or no impact on consumer energy prices in the immediate future. The impact in the long term will also be negligible.'' So why are we doing it? Why would we want to harm five large oil and gas companies that work internationally, that employ 9.2 million people in the United States directly--good, hard-working Americans working in and for these companies? Why are we doing this? That is a good question.

No. 2. The industry pays its taxes and then some. I think there is some real misunderstanding that these large oil and gas companies pay either little or no taxes. Maybe people have been told, and believe, that they have so many tax subsidies they do not pay taxes. I want to put that issue to rest. First of all, three companies, ConocoPhillips, Chevron and ExxonMobil--I am sorry I don't have this chart blown up. I would like to, and I don't know if the camera can pick up this small 8- x-11 sheet here--you will see by the red lines here, these three companies have paid approximately 49 percent, 43 percent and 42 percent. This is their tax rate. I think that is pretty high.

They are making billions of dollars, that is true, because prices are high and there is an increase in demand. That is the American way. That is the profit incentive. I know people are angry they are making these profits, but they are paying significant amounts in taxes. In fact, these companies pay more than $86 million to the Federal Government in income tax and production fees every day. That is $86 million today, $86 million tomorrow, and the next day and every day. So the thought that they are not paying their taxes, that they are hiding behind some extraordinary loopholes in the Tax Code doesn't measure up.

People might say: Well, Senator, what are those blue lines on your sheet? I will tell you what those blue lines are. This is Walmart. Walmart is a big company. They make a lot of money and they are in all of our States. Their tax rate is 33 percent.

One of the most successful investment companies--Berkshire Hathaway-- makes tons of money, has profits for shareholders, has made thousands of millionaires--and congratulations to them, people who have invested in Berkshire Hathaway. They have made millions of dollars. Warren Buffet is one of the most respected investors. I personally have a great deal of respect for him. But you know what their tax rate is? Thirty-one percent.

What is Intel? Intel is one of the largest companies in the world--27 percent. Phillip Morris, a tobacco company, 27 percent; IBM, 27 percent; all the way down to telecommunications companies--Verizon and Coca Cola, 21 percent; all the way down to GE, one of the largest companies in the world. You know what they paid last year? Nine percent.

In fact, people were shocked--myself being one of them--that GE paid zero taxes to the Federal Government last year when these five big companies are paying $86 million a day. GE paid nothing any day--all year--zero. Yet these five oil companies are paying $86 million a day and we have to have this discussion?

Should some of these subsidies be looked at? Absolutely. When should they be looked at? In the Finance Committee, when we look at all the subsidies in the Tax Code for these other industries--both oil and gas and non-oil and gas, resource based and not, both retail, telecommunications and software companies, such as Intel, Microsoft, et cetera. I will be the first to stand and say that many of these subsidies--or some of them--need to be eliminated, particularly when the taxpayers are looking to close the deficit and reduce our debt.

Most certainly we need revenues. Should this be on the table when that serious, thoughtful, deliberate debate happens? Yes. But today, this is entertainment. And it is not funny and it is not laughable. It is very serious.

I am going to submit this for the Record. These are all the large companies--these five large oil companies that everybody enjoys beating up on. I understand they are making a lot of money today, but that is no reason to go after them, singling them out, particularly because of the 9.2 million Americans who are working in and around and for them, and the thousands of independent companies and suppliers that work in partnership with them.

Let me give my third reason for opposing this bill. This approach undermines domestic production. According to the EIA study, published in 2008, the oil and gas industry received about 13 percent of the U.S. subsidies. If you listen to the debate on this side of the aisle, you would think that they get all the energy subsidies and that they don't need them because prices are high and they can make a lot of money drilling. The facts are that of all the U.S. energy subsidies, the oil and gas companies--the big ones--get only 13 percent, but they provide over 60 percent of the energy. So for the 13 percent of subsidies, they produce 60 percent of the energy.

Unfortunately, while the United States was at an all-time high of oil production, the EIA, which is the Energy Information Administration, now estimates U.S. Gulf of Mexico production will decline to 1.14 million barrels a day by the year 2012. The last time the Gulf of Mexico produced less than 1.2 million barrels of oil was in 1997--more than 10 years ago.

Everybody--including the President and the Secretary of the Interior, who was before our committee today--is touting that oil production is at an all-time high. They are correct, but that is only half the truth. If you flip the page, or look to the next chapter, what you will see is that production is declining precipitously for two reasons. We have almost shut down drilling in the gulf. There has been virtually no new exploration and production because of bureaucracy and delay. And attacks like this don't help. We need to be increasing production, not decreasing it.

The truth is we are at an all-time high, but we won't be for long. We are going in the wrong direction. That is

why I want to commend the President for saying he wants to step up domestic production. We couldn't step lively enough for me. So I am hoping that is what we can do and move on.

I see my colleague on the floor, so I will try to finish in 2 minutes.

The fourth reason for opposing this bill is that it does hurt independent producers. I am happy to see this main attack is not directed at independents. That would be a terrible thing, because it is pretty bad for the big companies, but it would be devastating if it were aimed at independents. It does affect independent producers, because many of the independent producers, several of which I represent--some are in West Virginia, some are in Texas, some in Oklahoma, some of them are in Pennsylvania, and some in New York--so I am not the only Senator here who represents a lot of independents in oil and gas, and ``wildcatters'' have a very proud tradition where we come from--have partnerships with the big oil and gas companies. The money and the resources they have go into supporting those partnerships with those independents. So indirectly this does affect independent producers.

Finally, this bill gets our energy and job priorities backwards. One of the provisions in the bill, which I wish to speak to, says the economy of the United States suffers huge net losses in jobs and productivity from growing annual trade deficits in energy due mainly to the $250 billion or more we pay for foreign oil. I understand that we have a trade deficit for foreign oil. So why are we doing something to diminish domestic production right here at home? That is what this bill does.

These are five reasons I am going to vote against the bill. I urge my colleagues to do the same. This industry contributes a lot to our economy. If this country would make it a priority to increase domestic production and to reduce our foreign consumption, we would reduce that annual trade deficit and do right by our people.

There are many other things I would like to say, but we are restricted on time. I will submit the rest for the Record. I can only say we need to produce more at home, produce it safely, and produce it equitably.

Finally, when we want to review tax subsidies across the board for all big companies I will be at the table. Until then, I am going to sit at this seat and vote no.

I thank the Senator.

Mr. President, what is the order?

Is there a specific time limit on each individual Senator?

I ask for such time as I may consume, probably less than 15 minutes.

I want to say that the Senator from Alaska does an excellent job of representing the oil companies. She puts forward the oil companies' arguments magnificently. She is very good at it. She was an economics major, and so was I. She said what she learned in her time, and let me tell you what I learned.

I learned that corporate welfare is wrong, that corporate welfare to companies that are on the Fortune 500 list is particularly wrong.

ExxonMobil, No. 2 on the Fortune 500--excuse me if I do not cry for Exxon. Forgive me if I shed no tears for Chevron--they are No. 3--and forgive me, ConocoPhillips. You are No. 4, but you are working on it. I tell you whom I shed tears for--my people at home who are having to pay ridiculous prices and who also have to face a Federal deficit and are looking to us for leadership here. And leadership requires us to say: How long do you have to give corporate welfare to oil companies that have been getting it for 100 years? Count them--100 years. And they are so huge. They are multinational. They are multibillion. I will get into what their people earn, what their CEOs earn in a minute.

So I learned that corporate welfare is bad. It distorts the market. And to compare the tax deductions Big Oil has with the home mortgage deduction gets right under my skin because the people who benefit from the home mortgage deduction are primarily the middle class of this country. So do not come here and compare home mortgage deductions with corporate welfare for the biggest companies in our country.

When are the defenders of Big Oil going to decide how much corporate welfare is enough? When are the defenders of Big Oil going to answer this question: How high does the deficit have to go before you are willing to step up to the plate and end corporate welfare for the biggest corporations that are cleaning our clocks all the way to the bank? I would hope the time is now.

I am going to try to lay out in a series of charts why I believe that. So let's go with the first one.

First of all, we see the first quarter profits: ExxonMobil, $10.7 billion; as a percentage increase from last year, 69 percent. I am supposed to cry for them. I don't think so. BP, with all of their troubles, corporate profit, $7.1 billion--this is just in the first quarter--up 17 percent; Shell, up 30 percent; ConocoPhillips, up 44 percent; and Chevron, up 74 percent. Yet Big Oil has the defenders on this floor saying: Wah wah. We cannot allow them to pay their fair share.

Well, I tell you, we have a deficit problem. If we cannot ask the wealthy few in this country to do their share, I do not know where we are headed.

Let's cry for Big Oil--or let's not. Mr. President, $14.5 million is the average compensation for the big five oil company CEOs. That is 307 times the average salary of a firefighter, it is 273 times the average salary of a teacher, it is 263 times the average salary of a police officer, and it is 218 times the average salary of a nurse. So we actually have people in this Senate coming here not only to defend these corporations but the CEOs who are crying to us that their companies cannot pay a few dollars more to help us solve our deficit problem.

Do you know what? We could lose this vote. They are filibustering it. We need 60. Let the American people see who is on their side.

Well, who is on the side of these corporations? The effective tax rate for Exxon is 18 percent on their $7.7 billion in income. A family of two teachers has an effective tax rate of 19 percent. Can you believe this? We have people coming to this floor crying for the oil companies when they pay an effective tax rate less than a family of two teachers. ExxonMobil, 18 percent on their billions; a family of a truckdriver and a dental hygienist, 19 percent. So the effective tax rate of these humongous, multibillion-dollar, multinational corporations is less than our middle-class families, and people are coming here to cry tears for these oil

companies, and the companies were whining in front of that committee. I mean, they may be very nice people, but they are out of touch. I agree with that. I think it was Senator Rockefeller who made that statement.

What we could do with the $21 billion over the next 10 years. We can continue these handouts, this corporate welfare to Big Oil, or we could fund the entire COPS Program for all of those 10 years and we could also provide afterschool care for 2 million kids. So I am asking people, would you rather have a cop on the beat at home and know our police are out there and they are protecting our families, would you rather make sure 2 million kids are kept off the street and have quality afterschool programs, or would you rather continue corporate welfare for these five corporations in the Fortune 500--three of the American companies are in the Fortune 500.

We could also provide 10 years of Federal Emergency Management Administration disaster relief. We are looking across this great Nation of ours, and we are seeing flooding, evacuations, sand-bagging--all of the problems--typhoons, hurricanes, and in California we know about earthquakes. FEMA is running out of money. Would you rather make sure they are ready for the next disaster or would you rather continue corporate welfare for these five corporations? You have to answer that question, America, because it does not look as though we are going to win this one.

These are issues you have to decide when you vote. That is the beauty of this country--people make a decision when they vote. If they agree with the Senator from Alaska that these five big oil companies still need corporate welfare, they know whom to vote for.

What could we do with $21 billion over the next 10 years? We could fund the Ryan White Program, which handles the AIDS epidemic at the level the President requested, and get rid of that dreadful disease.

You heard the sort of veiled threats from my colleague from Alaska, an oil State. I fully respect her; I just disagree with her entirely. But she has the absolute right to say what she said and believe what she said. I think it is parroting what the oil companies say. That is fine. That is her option. But the Joint Economic Committee said that repealing the oil subsidies would have no effect on consumer energy prices in the immediate future. So all of those threats that they are going to raise prices--I ask you rhetorically, Mr. President, for all of the years they have been getting all these subsidies, have they ever lowered their prices? No, they have not. The Congressional Research Service said that a small increase in taxes would be unlikely to reduce oil output and hence increase petroleum prices. So the experts are saying that nothing in this bill to make them pay their fair share is going to adversely impact gasoline prices.

The former CEO of Shell Oil said that with high oil prices, such subsidies are not necessary. He said that in February--their own people. Their own people. Yet, when they come to the committee, they are all whining about it.

Then you hear from those from the oil-producing States: Well, we do not have enough rigs in operation. This administration is not drilling.

Excuse me. There are such things called the facts. Let's look at them in this chart. We see more drilling than ever before. This administration is moving forward. The oil companies have over 50 million acres of leased land and offshore that they can drill on today, and all they want is more, more, more. They want to come to California, drill off our pristine coast, and threaten tens of thousands of jobs we have in our fishing industry, our tourism industry. They do not have to do that. They are sitting on these leases. They are drilling many more.

So let's just have the facts be part of the debate. That is what I am trying to do today with these charts, is to lay out the facts.

Now, how do we reduce gas prices? I had a press conference actually in an independent gas station last month. The independent gas station owner was wonderful. He said: I agree with you, Senator.

There I was, coming out with this plan. Here is how we can reduce gas prices:

End Big Oil subsidies and take that money--some of it--reduce the deficit, and take the rest and invest in alternatives so we have alternative clean fuels and batteries that can run our vehicles so we do not have to have these automobiles that are gas guzzlers.

Crack down on fraud and speculation. A lot of this increase is due to that.

Use it or lose it, say to the oil companies. You own all of these leases; drill on those leases.

Release oil from the SPR. We know the Strategic Petroleum Reserve has a tremendous amount of oil. This is the time to tap it. The last time we did it, prices went down 30 percent.

Invest in clean energy and efficiency.

Reduce exports. Can you believe that the producers right here in America are exporting their oil--some of their oil? Keep it home. We need it here.

So that is a plan we can take. But let me conclude my remarks this way. In the land of the free and the home of the brave, we need to have some fairness in our lives. It is crucial.

All the talk about competition--we want competition. You do not have competition. When you are looking at these huge companies--and my colleague from Alaska talked about comparing them to these little bitty solar companies that are just getting started. When companies are just getting started with a new technology, that is one set of circumstances, but when you give these tax subsidies to Big Oil, you distort the price of the commodity. You distort the price of the commodity and you bring it down. Therefore, it is anticompetitive with other sources of energy.

This is the moment. We are looking to cut the deficit. We are looking for ways to bring billions of dollars home so that we can get out of the red. What could be more perfect than this opportunity in the name of fairness, in the name of competition, in the name of deficit reduction, frankly, in the name of the consumer? Let's have some fairness. Let's not come down to the floor and compare these corporate giveaways to the mortgage deduction our middle class so needs.

I thank you very much for this opportunity. I hope we will have the courage to vote to end this corporate welfare.

I yield the floor, and I suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent that all the time not used be charged equally to both sides.

Mr. President, I rise to speak to S. 940. Tomorrow evening, we are going to have a vote on whether to proceed to debate this bill, which closes oil and gas tax loopholes, thereby raising a significant amount of additional revenue for important projects in the United States of America.

I rise in favor of this motion tomorrow because if we have a successful vote tomorrow evening, we will finally get to debate this issue of whether we should continue to have massive tax giveaways to the most profitable companies in America.

Gas is at $4 a gallon. Every American is going to the pump, and they are finding that, once again, the total toll as they fill up their 15- gallon tank in their car is well over $50 and can hit $60. That is a huge chunk out of my family budget, once or twice a week. It diminishes what is available to be spent for other core expenses to the families. Indeed, that $4 a gallon at the gas pump is raiding Americans' pocketbooks.

Americans do not also need to be subsidizing the same highly profitable oil companies through their paychecks, through tax loopholes. Make no question, the companies are highly profitable. Oil is now $100 a barrel. So the companies are able to sell oil that costs no more to produce today than it did 1 month ago, no more to produce today than it did 3 months ago, when oil was much lower, no more expensive to produce today than 1 year ago, when it was $3 a gallon.

So oil companies are experiencing enormous profits. The final quarterly filings by ConocoPhillips, $3 billion in profits--this is just quarterly, over 3 months--BP, $7.1 billion in profits; Exxon, $10.7 billion in profits.

That $10.7 billion equates to $5 million an hour every hour, day and night, throughout the week, throughout the weekend, through the entire quarter--$5 million per hour.

I think, if you have an ounce of common sense, then you will recognize if you are making $5 million per hour, you do not need taxpayer subsidies to stay afloat.

These subsidies come in many forms.

The first is the domestic manufacturing deduction for oil and gas. This allows you to deduct a specified percentage--6 percent--of your qualified domestic production income. So it is not just that you get to deduct expenses, you also get to deduct income as if it was a business expense.

Wouldn't all of us, when we are filing our taxes, like to deduct our income as an expense and, thereby, drastically cut our tax bill? Well, it is a sweet deal for big oil.

Then they have the ability to expense intangible drilling costs. The basic notion is that when you have equipment that is necessary for the success of a company, then you depreciate that equipment over the life of the equipment. If it is equipment that lasts 5 years, you expense it over 5 years. These are things, for the oil industry, such as derricks and tanks and pipelines and other physical structures. But this allows the companies to take that deduction of the entire expense immediately, not expense it over the life of the capital equipment like everyone else. So it is another sweet deal.

The third is a special deduction called the tertiary injection cost deduction. It comes in the form of a tax credit. A tax credit is much more valuable than a tax deduction because it is a dollar-for-dollar deduction in the taxes you owe. This is for employing enhanced oil recovery methods--methods that are to the benefit of an oil company because they get a lot more oil out of an oilfield if they employ wise stewardship of that field. So they have an incentive to do this anyway, but we are giving this huge bonus credit. That is a sweet deal. That is sweet deal No. 3.

Then you have the dual capacity taxpayer credit. This one you almost cannot believe is real because dollar-for-dollar, we, the taxpayers in America, reimburse the oil companies for the taxes they pay overseas. Well, quite frankly, it is America subsidizing the foreign taxes. So oil companies just pass through. It certainly is an incentive for the foreign governments to tax the oil companies extremely heavily because they get it all back from America. It is also proven incentive for companies to call royalties a foreign income tax so they get reimbursed for their royalties as well.

As proposed, changing this will reduce the deficit by $429 million in fiscal year 2012 and $6.5 billion in fiscal year 2021. That is the fourth sweet deal.

The fifth is the percentage depletion deduction. Firms that extract oil or gas are permitted to deduct 15 percent of the sales to recover their capital investment in oil and gas reserves. They get to, again, deduct their sales, essentially in a situation as if they are an expense. That is sweet deal No. 5. In that case, often the value of that deduction exceeds the value of the original capital investment by the company. They get more than compensated.

Then, No. 6: royalty relief for deepwater Outer Continental Shelf production. The Department of the Interior must allow companies doing certain types of drilling on the Outer Continental Shelf--deepwater drilling and deep wells in shallow water--it allows them to not pay royalties on a certain minimum volume of production. Royalty relief is a great benefit to the oil companies and comes at great cost to the American Treasury. That is sweet deal No. 6.

This world in which companies have had, over the years, inserted various provisions--making a very strong case for each one at the time of why this was necessary, that was necessary--amounts to an enormous tax bill. This bill that takes and modifies these provisions for the top five companies that have the largest profits would produce about $2 billion in savings from closing these six tax loopholes.

The question we all need to ask ourselves is: Can that $2 billion per year be put to better work than subsidizing companies that are making enormous profits at the pump? One possibility is that $2 billion could go toward decreasing our deficit. A lot of folks on the floor of the Senate talk about how important that is. Which is more important, giveaways to the most profitable

companies or reductions in the national deficit?

How about creating jobs? We have constantly been trying to get a bill to this floor that provides low-cost loans for energy saving renovations. It is considered the most powerful job creator dollar-for- dollar of any idea that has been put forward. It is in the form of HOME Star, which provides low-cost energy saving loans to families, and they can pay them back from the savings in energy. So it is a win-win for the family, and it puts people to work in America in a construction industry that is 50 percent unemployed.

How about Building Star? It does the same thing on commercial buildings. How about Rural Star Energy, the bill that provides these low-cost loans through rural co-ops, so rural America can benefit from energy savings and can pay back these low-cost loans from the savings on their monthly utility bills.

The reason this creates so many jobs is because not only can you not outsource overseas the jobs themselves for the construction work that is done, but almost every single thing that is used in the energy saving economy--from the insulation, to the caulk, to the double-paned windows--is made here in America. That is why you get so much tremendous leverage. You put the American construction industry to work and you utilize American products.

Maybe it is more important to create jobs than it is to give away $2 billion a year to the most profitable five oil companies in America. Maybe it is important to shore up Medicare. Some of my colleagues have talked about they want to dismantle Medicare. They want to turn it into a voucher program, where the voucher would not increase as medical costs increase, so that slowly Medicare would be wiped out as the ability to provide health care for our seniors. Maybe it is more important to provide a strong Medicare Program than it is to give away $2 billion a year to the most profitable five oil companies in America.

Maybe it is more important to enable our children to get loans to go to college. We are becoming the first generation of adults whose children are getting less education than we have because the cost of tuition has gone up disproportionately to the income of a working family. The more tuition goes up, in comparison, the more our students have to wrestle with whether they can afford to go to college and, if they go, whether they need to drop out after the first year in order to go back to work in order to save to go the second year. When students leave college in that situation, they do not often get back.

Maybe it is more important that we proceed to help American students--our children--go to college than to give away $2 billion to the five most profitable oil companies in America.

Tomorrow, we are going to have a vote. The vote is simply whether this is important enough to debate, whether it is important enough for us to come together as a Chamber and say it matters whether tax loopholes were carved out through special interest lobbying over the past 20 years in order to get very sweet deals when they serve no basic core purpose in the American economy. We need to have that debate. I wish to encourage my colleagues across the aisle to vote yes tomorrow, to vote yes on a motion to proceed, so we can get to the bill and have that debate.

Under the rules that have been established, we need 60 votes; otherwise, my colleagues across the aisle threaten to filibuster, that they are going to do a silent filibuster, blocking the ability of this Chamber to have a debate. Let me tell you, this needs to be debated.

Fiscal responsibility needs to be debated. These tax giveaways need to be debated. The tradeoffs between assisting our students and tax giveaways need to be debated. The tradeoff between reducing the deficit and these giveaways needs to be debated. The contrast and comparison between shoring up programs that provide health care to our seniors and these giveaways need to be debated.

I encourage my colleagues: Do not shy from your responsibility to wrestle with difficult challenges. Come and vote yes tomorrow evening on proceeding to debating the giveaways to the five most profitable oil companies in America so we can consider whether those funds will be better serving American citizens by reducing the deficit or by providing core programs.

Thank you, Mr. President.

Madam President, to me, this argument is, in fact, all about fairness. It has nothing to do with class warfare. It has nothing to do with gotcha but has to do with abrogation of social responsibility on the basis of levels.

Every once in a while we have an exchange in the Senate or in a Senate committee that is revealing and stunning all at once. Recently, I had one of those moments when I had the opportunity to ask a question to--guess what--five executives from the largest oil and gas companies in the country.

I was not linking price of gas--but in the people's minds it is--with the gas prices up beyond $4 a gallon, with many people spending close to $100 a week to gas up their cars. I was cautiously optimistic that we would have in this Senate Finance Committee hearing a real dialog on the idea that everybody has shared responsibility and that you share your responsibility--in this case, the need to balance the budget or come closer to it and then share prosperity. But we have to share responsibility first because that is what leads to the discipline that allows prosperity generally in this country to get ahead.

I thought the oil executives might at least reveal a bit of unease, a bit of discomfort on their part about how gas prices are standing like a dead weight on our economy, about the fact they make so incredibly much, inexplicably, unexplainably so much money and loving that, especially when they together earned just about $35.8 billion in profits in the first 3 months of this year.

How wrong I was. They were eager only to defend the way Big Oil does business, defend the enormous salaries, defend the business model that puts control of gas supply in the hands of a few. One would not even answer when asked about his company's claim that trying to reduce taxpayer subsidies--which is what we want to do--given to this industry would be un-American. He said that a number of times in that exchange. It was not very fruitful, but it was insightful.

As I said then, put simply, these men are all completely out of touch--deeply, profoundly out of touch--with what the rest of the country is going through. Again, that is what it is about, fairness. Do you know what other people are suffering? Their situation is this: very profitable. Other people are on very hard times. Is there not some way they could give up their tax subsidies--in this case $2 billion a year--instead of making a $125-billion-a-year profit--not just more money but actually a profit; $125 billion would go down to $123 billion. They would not hear of it. They are so caught up in

their profits that they have lost sight of what is happening in mainstream New Hampshire and mainstream West Virginia, across our economy, and our schools on Main Street and around the kitchen table.

Gentlemen--the five--here is some of what you need to know. For starters, Congress is in the midst of a full-throated debate about how to reduce our growing deficit without breaking the backs further of working families or leaving our seniors out in the cold literally or reducing our support for the veterans who serve our country and children who just happen to be our future. We are debating proposals to cut back Social Security and the promise that we made to generations who have worked and want to live their final years with dignity. We are debating legislation that forces Medicare to be privatized, how it will cost senior citizens about $6,000 more per year. I hope they know that. Medicare privatized, chopped up, made an optional grant program run by States, drastically scaled back.

The Congress is debating deep cuts to Federal programs ranging from highways and airports to medical research to coal mine safety inspections and money for schools--everything.

Quite simply, we are talking about making drastic cuts to programs that touch the lives of virtually every single person in the country, except for them. These slick executives seem blind to the real-world consequences of having made almost $1 trillion in profits during the past decade--profits--while collecting $4 billion a year in subsidies, courtesy of the very same U.S. taxpayers about whom I have just been talking, the same taxpayers who are also forced to pay at the pump and whose lives are being changed dramatically because of their position.

Why focus on them? Because they are a symbol. They are the top of the heap. They always prevail. They always win. They always have the lobbyists, the campaign contributions. They always can get what they want. Everybody always caves to them because they are so big, as they fly around in their shiny jets. I do not think it is going to be that way this time.

The same oil executives who blanch if anyone questions their mega salaries--speaking of salaries, it might be interesting to know that the CEO of ExxonMobile is paid $29 million a year. I am just trying to think of the Presiding Officer's State of New Hampshire. I wonder how many people make $29 million a year just in salaries. I do not know if that includes stock options.

During my conversations with these executives last week, we talked a little bit about how the effective tax rate on their profits is significantly lower than what average workers make in my home State of West Virginia and in the Presiding Officer's home State.

Exxon paid a 17-percent effective tax rate over the past 3 years--17 percent--while the average individual in my State and the Presiding Officer's State paid an effective rate of 20 percent. Is that class warfare? Is that gotcha? Or is that about fairness, about people doing something to help their country when their country is almost on its knees?

The effective rate, to explain, is the amount of tax one is actually paying on income earned when factoring in deductions and credits.

It is a vast understatement to say West Virginians, like many others all across the Nation, are not having an easy time of it during this period of record oil company profits. And they--those five--understand perfectly well that there is no longer any justification for maintaining generous subsidies for this highly profitable industry. The public appears to feel that way. The poll numbers are just stunning--70 to 30 that it is not right, that we should take away the subsidies. It varies according to the poll, but it is always high up, including two- to-one Republicans across the country who believe they should not be able to have those tax subsidies that we are so easily giving them.

They know that without a willingness to stare down sacred cows like corporate subsidies--not just with them but with others--we won't ever be able to make progress in eliminating the massive Federal deficit which is staring us in the face. Why wouldn't they care about that? It is so easy for them. It is called sharing, being fair. But no, it doesn't work that way.

The average West Virginian, again, makes $32,000 a year. They can't afford another 10 years of handouts to Big Oil. The current high gas prices are like a dark cloud. The working class in rural States like mine commute 25 miles or more each way every day, and high gas prices cut heavily into their weekly paycheck. Of course they do. Things are much worse in the summer, of course, when people travel, if they can any longer afford to. I hear often from constituents who are experiencing sticker shock at the pump. Police departments, schools, hospitals, and community organizations also feel the pinch of rising fuel costs and the pinch of everything else that isn't coming through. Philanthropy is down in this depressed economy. It is bad. Even the smallest increase can have a serious impact on family budgets and a business's bottom line.

I do not mean to suggest that the oil industry profits and subsidies are the sole culprit for rising gas prices because listening to those who are industry experts and economists, too, has convinced me that the big factor in the rising cost of energy is the role of speculators. I won't get into that too much now, but I will say that these speculative investors make a quick profit in betting on what the cost of a barrel of oil might be next Friday. If they turn out to be right, they get a whole lot of money. I mean, it is stupid. It is Wall Street at its dumbest, and they have shown us several ways to be that way. They take no risk themselves.

I am not alone in thinking these speculators are driving up oil prices and creating more price volatility. I have joined with other Senate colleagues in asking the Commodity Futures Trading Commission to look closely at the role of speculators in the oil futures market and in pressing the Commodity Futures Trading Commission to get moving on a power they already have, which is to set margins on what speculators can make--to crack down, rein this in. I have also written to the Federal Trade Commission--to investigate any potential fraud or market manipulation in the oil markets.

I also believe what is needed in the big oil industry is a sense of fairness. It is not too much to ask when it comes to paying taxes, when it comes to paying the price for gas. To me, fairness has always meant shared sacrifice in tough times and shared success in good times--a sense of giving something for the larger good. I am not suggesting that they stop being competitive or aggressively profitable, but at least show for a minute they see where we are today. If they had expressed concern about average people and then refused to take any decrease in their tax subsidies--paid for by these people I am talking about--that wouldn't have given me much comfort, but at least it would have been just a bit of a bend. We got none of that. What we got was, we like our business model, we are staying with it, don't punish us for being profitable. We do business the way we do business. We have been doing it for 130 years, and that is that.

So what is needed here is a reminder that a lifetime of always beating their adversaries and never losing or giving anything of themselves to the greater good does not, in fact, lead to a prosperous or morally just society. That is not too much to ask, especially of Big Oil, and I am not going to stop just because they do not get it yet.

I thank the Chair, and I yield the floor.